An Economist Talks About Turkey: 5 Facts About Thanksgiving Awards

The US Department of Agriculture monitors wholesale and retail prices of turkeys throughout the year. The wholesale price – what grocery stores have to pay for an item – during the first full week of November was about 81 cents a pound for a frozen turkey. The USDA found that the national retail price was about 83 cents a pound a week later, which roughly corresponds to the time needed to get the bird to a wholesaler in your store. .

This means that the typical US store sells a frozen turkey about two cents more than its cost. In other words, this 15-pound bird pays only 30 cents to the retailer, which does not allow him to cover the costs of transporting the delivery truck to the shelf, to put it on sale or to keep it frozen while on sale. along the process.

Why are stores willing to earn so little money on such a big seller?

Stores know that people who come to buy turkeys will probably buy other items, such as seasonings, disposable roasts and sodas. The other items are those where the stores bring in their money because the profit margins of these items are much higher than those of the frozen turkeys.

Fresh turkeys are much more profitable

While the stores do not earn money on frozen turkeys, fresh turkeys are an entirely different bird.

The USDA's weekly report from early November indicates that the wholesale price of a fresh turkey is $ 1.12 per pound. The current retail price of fresh hens, which is the bird most people like to serve, is $ 1.51 per pound, which is 68 cents more than frozen products. This means that stores will earn $ 5.85 for a 15 pound bird before taking into account other expenses.

Tom turkeys, which have larger bones and less edible meat, were cheaper for $ 1.25 a pound.

Stores understand that people looking to buy fresh turkeys are less price sensitive than those who buy frozen birds. This makes fresh birds a more profitable product.

On a side note, is a fresh turkey worth it? I will leave to gourmands the care to solve this uneconomic question, because I do not really like turkey fresh or frozen.

Where you buy your turkey account

Many people travel from one part of the United States to another to celebrate Thanksgiving with friends or distant family members.

Is it worth it to buy a turkey at one location and take it to a cooler across the country?

May be. Turkey's prices vary considerably depending on where they are purchased.

At present, USDA data indicate that the country's cheapest country to buy frozen turkeys is in the south-east of the country, where the average price of a hen frozen from Virginia to Florida does not exceed 72 cents per pound.

But if you do not live in this area – or plan to visit someone there – I would not recommend going on a special trip just to buy a turkey. The price difference is not so great. In the most expensive regions of the United States, frozen turkeys cost about $ 1.06 per pound. These high prices are found in the central-south states, which range from New Mexico to Arkansas.

Why the difference? It's not because of the shipping costs. Arkansas is one of the states with the highest average price, although it raises about 1 in every 10 US-fed turkeys in the United States.

The most likely reason is due to the competition of the stores. There seem to be many more stores competing for consumer spending in the Southeast than in other parts of the country. The USDA tracks turkey prices in 7,400 supermarkets in the southeast. But it is able to track prices in only 4,900 stores in the south-central part of the country.

No need to store turkeys

There is no need to stock up on Thanksgiving if you want to serve Turkey in December. This is because the retail price of frozen turkey is generally lower in December than in November.

The Bureau of Labor Statistics tracks the price of a few brands and specific weights of frozen turkeys for decades as part of its efforts to determine inflation rates in the United States.

In the last 10 years, the price of turkeys followed by the office was six times lower than in November. The other four times the price in December was only 2 or 3 cents a pound.

Cheaper with time

Finally, turkey has become much cheaper over time compared to other items that people buy.

In November 1980, when the office began tracking turkeys, he found that the price was around $ 1 a pound. This would be close to $ 3 after adjusting for inflation, which is almost double the current average of $ 1.58.

In simple terms, the retail price per pound of frozen turkeys has almost halved since Jimmy Carter was president.

Thanksgiving is a wonderful holiday to spend with family and friends. Perhaps more importantly, since turkeys are getting cheaper, my family has more money to spend for the better part of the meal: dessert.

Jay L. Zagorsky, Associate Professor, Boston University

This article is republished from The Conversation under a Creative Commons license.

Jay L. Zagorsky

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Jay L. Zagorsky